Quarterly Economic Bulletin

October 2017

IntroductionThis quarterly bulletin looks at a variety of indicators to provide an overview of the economic health of the West of England Local Enterprise Partnership area, which covers the West of England Combined Authority (B&NES, Bristol & South Gloucestershire) and North Somerset.

The bulletin is divided into six sections:1. Economic overview2. Business conditions3. Businesses that succeed4. World class skills for employment5. Infrastructure fit for the future6. An attractive place to visit

1. Economic Overview

(2015)

Employment Rate

Averagehouse price

£269,951(May 2017)

78.3up on previous year by 0.8p.p

remaining static on the previous

year

3.8

Unemploymentrate

Jobs advertised

54,589up 5,790 on Q3

2016

GVA

£31.7bn

2. Business ConditionsInternational Context

• Global output remains on track and is expected to strengthen to 3.6% in 2017 & 3.7% in 2018.

• This is based on upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia; offsetting downward revisions in the United States and United Kingdom.

National Context

• GDP for the quarter rose by 0.4%, compared with 0.3% in each of 2017's first two quarters.

• This has been driven by the services and manufacturing industries, but construction output has fallen.

• Uncertainty around Brexit remains and there is evidence to suggest that this is affecting investment decisions.

Local Context

• The West of England economy continues to perform strongly although showing signs that its slowing, reflecting national economic conditions.

• The region continues to be a forefront of innovation, digital creative and disruptive business. With recent events such as VentureFest and the Festival of Future Cities being held in the region.

• Bristol City Region has been identified as the national leader in Smart City innovations in a recent Huawei report.

3. Businesses that succeed

3.1 Business Start-ups

Top Sectors for start-ups Q31. Real estate, professional services & support activities – 533 start-ups2. Recreational, personal & community service – 272 start-ups3. Wholesale & retail trade – 224 start-ups

N.B Start–ups are an indication of entrepreneurialism and innovation and it is within these business start-ups that the jobs of the future will be created. However, rising start-ups can also signal times of economic distress; survival and positive churn within these start-ups are what matters .

1,873start-ups in

Q3 2017

-1.7%on Q3 2016

27.2start-up rate

(Q3 2017)

3.2 Scale-ups

183Scale-up

businesses according to

Scale Up Institute data

Combined turnover

>£6BnAverage turnover growth

>£80kCombined employee number

45k

3.2 Scale-ups

What’s the challenge?Office space availability, affordability and suitability

What exists to support scale-ups?The Scale-up Enabler is currently developing a map of options.

Ideas we’re exploring• A property schedule for the region?• More scale-up friendly

landlords/managed properties

Where can you find out more?http://www.engine-shed.co.uk/scale-up-challenges-room-for-growth/

- Attend Scale-up Briefing: Room for Growth on 29 Nov at Engine Shed: https://scale-up-briefing-room-for-growth.eventbrite.co.uk

What’s the challenge?Access to and understanding of finance options

What exists to support scale-ups?The Business Finance Guide: https://thebusinessfinanceguide.co.uk/Alternative Business Funder:https://www.alternativebusinessfunding.co.uk/

Ideas we’re exploringNew and more active angel syndicates. Tools to bring finance options to life.

Where can you find out more?Keep an eye on the scale-up news via the Engine Shed for new initiatives and events planned for December and January.

Attend the Introduction to angel investment event: https://www.eventbrite.co.uk/e/an-introduction-to-angel-investing-tickets-38480136123

What’s the challenge?Leadership support and

What exists to support scale-ups?SWFoundersPro and various groups described in the blog linked below.

Ideas we’re exploringFounder focused events? Regional register of non exec directorsA variety of third party scale-up programmes due to launch early in 2018

Where can you find out more?http://www.engine-shed.co.uk/finding-founder-support/

Contact Briony Phillips, Scale-up Enabler: Briony.Phillips@engine-shed.co.uk

3.3 Growth HubThe West of England Growth Hub offers access to an extensive, connected network of business knowledge and skills partners, supporting local businesses to confidently expand and grow. https://www.wearegrowth.co.uk/

• 19 new sign ups in September

Top visited sites (Sept)

• EEN

• British Business Bank

• Set Squared

Top areas of need (Sept)

• Financing growth

• Operations

• Strategy

3.4 Invest Bristol & BathInvest Bristol & Bath (IBB) is the investment promotion agency for the West of England LEP area. The organisation undertakes a range of marketing activity and works directly with client companies to attract investment and employment into the area.

Leads generation:

• 23 new inward investment leads and 13 early stage prospects generated during Q2 (Jul-Sept 2017).

• Since April 2017, the team has generated 53 new leads and 22 new prospects looking to locate or expand in the West of England area.

• The team has seen a slowdown of new leads during Q1 and Q2 2017 compared to the previous year with activity mainly focussed on supporting the existing projects and pipeline.

3.4 Invest Bristol & Bath

New successes:• During Q2, IBB has successfully supported 8 new companies locate or expand in

the region with 213 new jobs committed.• Since April 2017, the team has supported 19 new investments into the region

creating 400 new jobs (comparable to the same time last year), and is on track to meet 2017/18 targets.

IBB Pipeline:• IBB continues to work on a strong pipeline of 151 active qualified leads and

projects (up 4% on previous quarter), in addition to 80 early stage opportunities.• The IBB pipeline of active projects indicates there are 9,870 potential new jobs

for the region (up 1.5% from previous quarter), of which IBB are confident that 730 new jobs will be committed in the next 6 months.

4. World Class Skills for Employment

• Higher than the employment rate for England which stands at 74.6

• Performing better than Core City LEP areas who have an average employment rate of 71.4

• But performing less well than our Southern LEP comparators who have an average employment rate of 79.4

Employment Rate

78.3up on previous year by 0.8p.p

4.1 Employment Rate

Source: employment rate – 16-64; ONS Annual Population Survey

• Lower than the unemployment rate for England which stands at 4.7

• Performing better than Core City LEP areas who have an average unemployment rate of 5.4

• But performing less well than our Southern LEP comparators who have an average unemployment rate of 3.6

4.2 Unemployment Rate

Unemploymentrate

3.8remaining static on the previous

year

Source: Unemployment rate – 16-64 ; ONS Annual Population Survey

• Jobseeker’s Allowance Claimant Count 5,220

• Lower than the claimant rate for England at 1.0.

Claimant Rate

0.7down on Sept 2016 by 0.2p.p

4.3 Claimants

Source: Sept 2017 claimant count with rates and proportions; ONS

4.4 Vacancies

Top 5 Occupations Advertised Q3 2017

Occupation No. Ads

Programmers and Software development 3,928

Human resources and industrial relations 1,550

Other administrative occupations 1,509

Business sales executives 1,395

Web design and development professionals 1,341

Top 5 Skills Advertised Q3 2017

Skills No. Ads

Customer Service 4,404

Business Management 3,937

Microsoft Excel 3,862

Project Management 3,038

SQL 2,459

Source: Labour Insight / Burning Glass (July. 01 2017 – Sept. 30 2017)

54,589jobs advertised

Q3 2017

5,790more than in

Q3 2016

4.5 Vacancies by Sought Occupation

Occupation Advertised Vacancies

Sought Occupation

Unknown 66 395

Managers & senior officials 1,853 160

Professional Occupations 6,169 60

Associate Prof & technical 4,742 50

Admin & Secretarial 1193 395

Skilled trades 1264 155

Personal Service 784 70

Sales & Customer service 1,269 3,690

Process plant & machine 1,037 75

Elementary 735 445

Source: Labour Insight / Burning Glass / Claimant Count, ONS (August, 2017)

• A clear mismatch between advertised vacancies and sought occupations.

• Demand for higher more specific skilled workers.

• Job seekers tend to look for lower skilled occupations.

5. Infrastructure fit for the future5.1 Housing Prices and Affordability

Source: House Price Index, Land Registry; and Annual Survey of Hours and Earnings, Office for National Statistics

£269,951Ave. house price

(May 2017)

1,278House sales

(May 2017)

North Som £29,933 £239,344 8

Bristol £27,519 £253,241 9.2

B&NES £29,842 £341,412 10.5

Median Annual Earnings Average house price Ratio

South Glos £29,752 £249,765 8.4

5.2 Office take-up and rents

Rents(£psf)

Bristol City Centre Rents £28.50

Bristol Out of Town Rents £21.50

Bath Rents £31.00

Source: Market Monitor South West of England & South Wales 2017, Alder King

Source: Cushman & Wakefield, October 2017

173,022 sq.ftBristol City Centre take-up Q3 2017

134,456 sq.ftBristol out of towntake-up Q3 2017

6. An attractive place to visit6.1 Tourism

c. 2,324,000 Passengers through

Bristol Airport during Q2 2017

+10%on Q2 2016

1,802,687Visitors to attractions

during Q2 2017

+6%on Q3 2016

499,524Room sales

during Q3 2016

+4%on Q3 2016